Germany’s Federal Environment Ministry recently announced it would be launching a USD 500 million climate fund that will provide microloans for individual energy efficiency or renewables projects initially through local banks in Brazil, China, India, Indonesia, Morocco, the Philippines and South Africa.
The loans will be primarily directed to small businesses, and all borrowers must demonstrate that energy efficiency will be increased by at least 20 percent.
The ministry will contribute USD 28 million, and KfW Entwicklungsbank, a German development bank, will contribute USD 75 million. Investments totaling the equivalent of USD 186 million are also anticipated from the European Investment Bank and the International Finance Corporation. The remaining funds are to be raised from public and private investors by 2015. According to Mr Norbert Roettgen, Germany’s Environment Minister, “the aim is to bring in funds from private investors, which will be hedged against losses with help of the public funds.”
By Stefanie Rubin, Research Associate
About KfW Entwicklungsbank (KfW):
KfW Entwicklungsbank (KfW) is a state-owned development bank in Germany. KfW has three goals: to reduce poverty, to make globalization fair and to conserve natural resources. KfW collaborates with a variety of local financial institutions in approximately 60 countries, including microbanks, commercial banks, village savings banks, non-governmental organizations and regional microfinance funds. KfW Entwicklungsbank has a portfolio of EUR 2.15 billion (USD 2.57 billion), around three fourths of which is made up of its own funds.
Additional Resources:
Source Article: The Associated Press: Germany setting up $500 million climate fund: http://www.businessweek.com/ap/financialnews/D9GKURJ00.htm
MicroCapital Universe: KfW Entwicklungsbank (KfW): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=KfW+Entwicklungsbank+%28KfW%29
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